This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Prepaid Cards Have Gone From Stigma to Selling Point

NEW YORK (TheStreet) -- Prepaid credit and debit cards are becoming a personal finance weapon of choice for more Americans.

According to a study last year from, U.S. prepaid card use grew to $64 billion in 2012 from $56.8 billion in 2011.

Additional data show Americans are coming to view prepaid cards as key elements in their banking and spending plans, with 59% of Americans with a checking account also using a prepaid card at least once per month.

"There are many reasons consumers use preloaded debit cards," says Ben Katz, chief executive at Los Angeles-based "While some people are in situations where they cannot get a traditional bank account, others wish to avoid the inconveniences and high fees associated with traditional branch banking."

Must Read: How Americans Feel About the Penny offers a look at the changing landscape of prepaid cards:

They are more used than thought, and are heavily used by middle class consumers. About 12 million Americans use prepaid cards, with most possessing a household income of more than $30,000 and having other debit and credit cards.

Consumers want to use them, instead of having to use them. Bad credit and too many bank overdrafts historically led to higher prepaid card use, but those days may be over. "The numbers indicate that the use of prepaid debit cards is no longer in the realm of 'I don't have a choice,'" Katz says. "Rather, it is a deliberate choice consumers are making."

Convenience is a big selling point. Technology has made the use of prepaid cards easier to use and added features. "[Take] real-time mobile smartphone deposits," he says. "You literally take a picture of a check, upload it to make your deposit, and the funds are immediately available." Consumers can also load up on network ATMs and use Western Union to add cash to their cards, adding to that convenience factor.

"People are busy," Katz said. "More and more, prepaid cards offer the convenience of being able to manage your money without having to go to a local branch."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.12 -1.00%
FB $107.01 2.70%
GOOG $766.79 3.30%
TSLA $237.11 3.00%
YHOO $33.67 -0.41%


Chart of I:DJI
DOW 17,841.19 +121.27 0.68%
S&P 500 2,096.21 +15.80 0.76%
NASDAQ 5,144.5520 +35.8860 0.70%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs